Macy's shares surged more than 10% Wednesday after the department-store chain posted stronger-than-expected fiscal second-quarter results and raised its full-year guidance, signaling traction in its turnaround plan despite tariff headwinds.
The retailer reported adjusted earnings of 41 cents per share, far exceeding Wall Street's estimate of 18 cents, on revenue of $4.81 billion, ahead of the $4.76 billion consensus, according to LSEG data. Net income fell to $87 million, or 31 cents per share, from $150 million, or 53 cents per share, a year earlier.
Macy's now expects adjusted full-year earnings of $1.70 to $2.05 per share, up from its prior outlook of $1.60 to $2.00. Revenue is projected at $21.15 billion to $21.45 billion, compared with the earlier range of $21.0 billion to $21.4 billion.
CEO Tony Spring told CNBC, "We're just well positioned right now for the environment we're in to take share, to deliver for our customers and to provide a better experience." He acknowledged tariffs remain a challenge but said Macy's is balancing those pressures with assortment upgrades and stronger inventory. "Tariffs are real. It's a component of the business, but we have tail winds that we are trying to mitigate against those headwinds," Spring said.
The company highlighted its best comparable sales growth in 12 quarters, fueled by Bloomingdale's, which saw a 3.6% gain, and Bluemercury, up 1.2%. Macy's namesake brand posted mixed results, but the 125 "go-forward" stores targeted for renovations and higher staffing outperformed, growing 1.1% on an owned basis.
Credit card revenue also climbed, rising $28 million to $153 million. CFO Tom Edwards told analysts the company is considering targeted price increases on certain categories due to tariffs. "We're adjusting prices, but as appropriate, not broad-based and really assessing it with our partners in an effort to remain competitive," he said.
The results mark progress on Macy's "A Bold New Chapter" restructuring, announced in February, which includes closing 150 underperforming stores by 2026 and investing in 350 higher-performing locations.
Still, executives struck a cautious note heading into the holiday season. Spring said shoppers are becoming "more choiceful" with discretionary purchases. According to PwC's 2025 Holiday Outlook, U.S. consumers plan to spend 5% less this year, the first expected decline since 2020.
